E.U. Aid Plan Sets Stage for Clash

WASHINGTON — Israel and its allies in Washington could find themselves on a collision course with the Bush administration over the European Union’s plan to pay the salaries of employees in the Hamas-led Palestinian government.

Faced with international pressure and with a looming humanitarian and political crisis in the Palestinian territories, sources say, the Bush administration appears poised to accept a decision by European nations to cover all or some of the Palestinian government’s payroll. But Israel’s ambassador to Washington, Daniel Ayalon, was quoted Wednesday as saying that Jerusalem would oppose any international plan to cover salaries.

Jewish communal leaders, speaking on condition of anonymity Wednesday, said that it is not yet clear whether they would wage a serious fight to block the E.U. plan. Already, though, a legislative fight has broken out over a bill — the Palestinian Anti-Terrorism Act of 2006 — aimed at blocking the White House’s ability to offer financial assistance to the Hamas-led Palestinian Authority or maintain diplomatic contacts with it.

According to congressional sources, the bill was originally drafted and is strongly supported by the American Israel Public Affairs Committee, the pro-Israel lobbying powerhouse. But several left-leaning Jewish groups have joined the Bush administration in opposing the measure and appeared to play a role in postponing a vote on the bill this week.

The various developments come as Washington is working with international allies to maintain a united front against Hamas, the Islamic fundamentalist movement that triumphed in the Palestinian elections in January and refuses to recognize Israel or disavow terrorism.

America agreed Tuesday to resume the flow of international aid to the West Bank and Gaza, albeit not through the Hamas-led Palestinian government and only for a limited three-month trial period. The decision came during a meeting in New York of the international “Quartet” of Middle East peace brokers, with Secretary of State Condoleezza Rice agreeing that the E.U. will devise a “temporary international mechanism” to send aid directly to the Palestinian people without it passing through the hands of Hamas.

But the Quartet — America, Russia, the E.U. and the United Nations — was intentionally vague on the question of whether the new arrangement would allow for European nations to cover all or some of the Palestinian government’s payroll, as they did before the Hamas electoral victory in January.

Washington seems poised to allow the E.U. to chart its own course on the issue. But Ayalon insisted that Jerusalem would oppose any international plan to cover salaries.

“I hope that the Quartet mechanism doesn’t plan to finance salaries of P.A. workers under the Hamas government,” the Israeli ambassador told the Israeli daily Globes. “External financing of salaries will only strengthen Hamas, intensify violence and block any chance of a solution.”

Jewish communal leaders said that it is too early to talk about a possible confrontation with the Bush administration because the guideline for the planned “mechanism” of distributing aid has not yet been determined, and current differences still may be finessed. The issue will be discussed when Israel’s new prime minister, Ehud Olmert, visits Washington later this month.

The E.U. supports a resumption of aid for salaries — at least for workers in the health and education sectors. The Bush administration so far has opposed it, both on political and legal grounds. Paying salaries of employees in a government that America considers a terrorist entity could violate American laws, administration officials said recently. Israel has clearly indicated that it does not view education as a basic humanitarian need, and is opposed to the international community paying teachers’ salaries.

The Quartet’s agreement, according to U.N. Secretary General Kofi Annan, talks about the establishment of a “mechanism” that would be “limited in duration and scope, and fully accountable.” Under the agreement, the full amount of the nearly $1 billion that the P.A. was receiving in aid before Hamas took power will not be restored.

It is not clear, however, whether the renewed funding will be used only for humanitarian purposes, such as food and medicines, or also to pay the salaries of Palestinian government employees. Off-the-record comments by American officials to reporters and diplomats in Washington indicate that the United States and the E.U. have agreed to disagree on this crucial point.

The White House does appear to have decided against the strategy — opposed by some administration officials, but opposed by Israel and other allies — to bring about immediate regime change in the West Bank and Gaza by triggering a complete collapse of the Palestinian economy. Instead, the administration is trying to boycott the government while keeping the economy running and maintaining a relationship with the president of the P.A., Mahmoud Abbas, leader of the secular nationalist Fatah movement that is locked in an increasingly bitter and violent feud with Hamas.

In addition to the deteriorating living conditions, street fights and shootouts between Hamas and Fatah activists in Gaza are now routine. The rivalry between Abbas and the Palestinian prime minister, Ismail Haniya of Hamas, is increasing. According to a report in the London Sunday Times, Israel recently foiled a Hamas plot to assassinate Abbas.

Palestinian officials and international relief workers in the territories are warning that after more than two months without salaries being paid to civil servants, the collapse of vital Palestinian systems — including health, education and law enforcement — is imminent.

In response to the crisis, Rice said this week that the administration would immediately begin to send medical aid to the West Bank and Gaza. It is not clear what kind of delivery network the administration will use to allocate this assistance and to what extent Palestinian government employees would be involved in distributing it.

Last week, the State Department sent a memo to Capitol Hill, making clear that it opposes the Aipac-backed bill that would curb the White House’s dealings with the P.A. as long as Hamas is in power. The House of Representatives was scheduled to vote on the measure Tuesday. But in part due to heavy counter-lobbying by dovish Jewish groups and in part due to the administration’s position, the bill is being stalled and softened.

In its memo, the State Department said that the bill is too restrictive and to sweeping, making no distinction between Hamas members of the P.A. and ones who are not affiliated with the terrorist group. The administration said it would like to maintain the option of providing aid to the Palestinian government in the future, if Hamas’s positions on peaceful relations with Israel change. The administration also would like to maintain relations with non-Hamas members of the P.A.

Aipac’s failure this week to rush the bill through the House, in a procedure that prevents introducing last-moment amendments, was celebrated by the three Jewish organizations — Americans for Peace Now, The Israel Policy Forum and Brit Tzedek v’Shalom — that, together with two dovish Christian groups, lobbied strongly against the bill. In an unusual move, the three Jewish groups positioned themselves squarely against Aipac. Peace Now even circulated a memo among House members, challenging a guide to the bill that Aipac distributed on the Hill.

The three groups learned Monday that the bill has been scheduled for a vote the next day, and they blitzed House offices with phone calls and letters, including copies of the administration’s memo. By Tuesday morning, the vote was deferred, pending a discussion of several of the bill’s provisions by the House Judiciary Committee. The committee’s chairman, Rep. James Sensenbrenner, a Wisconsin Republican, demanded that his committee mark up the bill. A spokesman for the congressman said that there was a technical misunderstanding, which led to the last-moment move. Many Hill staffers speculated that the House Republican leadership decided to stall and soften the bill so as not to alienate the administration.

The Aipac-propelled Hamas bill is all but certain to pass the House, where 291 out of the chamber’s 435 members have signed on as co-sponsors. After it eventually passes the House, a similar yet less restrictive version is expected to pass the Senate. Opponents of the bill say that they know it will be impossible to kill the measure and are therefore trying to soften it along the way. Some of the bill’s authors said in recent weeks that they anticipated such a strategy, so they included tough language as an opening position in the legislative negotiating process.

Several congressional staffers, who spoke with the Forward this week on condition of anonymity, said that the mood among many on the Hill in support of a more flexible bill is in part a result of the increasingly alarming reports about the deepening poverty, the health care crisis and the socio-political chaos in the West Bank and Gaza. Most major national news organizations, including The New York Times, The Washington Post, CNN and NPR, ran stories this week on the deteriorating situation. “Members are very concerned about the implications,” a senior House Democrat said, “and they know that the Israelis are, too.”